SeaBright Insurance is the first Northwest IPO in ’05

Originally published January 21, 2005 at 12:00 am
Updated January 20, 2005 at 10:13 pm

Among other items: Washington Mutual's new president and chief operating officer told analysts yesterday he plans to help execute the company's existing strategy; F5 Networks' stock surged 13.6 percent yesterday on a strong earnings report; and a federal judge in Utah has ordered IBM to turn over more programming code to SCO Group, whose lawsuit...

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Pacific Northwest

Insurer is the first Northwest IPO in ’05

SeaBright Insurance Holdings, a Seattle-based provider of workers-compensation coverage for maritime workers and other niche insurance products, has become the first Northwest company to go public in 2005.

SeaBright, the latest incarnation of what used to be Eagle Pacific Insurance, grossed $78.75 million when its initial public stock offering priced last night. The company sold 7.5 million shares at $10.50 apiece, close to the high end of its estimated range.

The shares are expected to begin trading on the Nasdaq market today under the symbol SEAB.

The IPO’s underwriters, led by Friedman Billings Ramsey, have the right to buy up to 1,125,000 more shares within 30 days to cover extra demand. That could add as much as $11.8 million to the deal.

Actual proceeds to SeaBright will be less, due to underwriting discounts and fees and expenses associated with the offering. The company plans to use the money to expand geographically and write more business in its core markets.

With the offering, Summit Partners, a private-equity and venture-capital firm in Palo Alto, Calif., now owns just over half of SeaBright’s outstanding stock. Before the offering, Summit owned 98.4 percent of SeaBright.

Three law firms file suit over Shurgard Storage Centers restatement

Three law firms announced separate suits yesterday against Shurgard Storage Centers, stemming from the Seattle company’s restatement last year of nearly three years’ worth of financial statements.

The firms — Schatz & Nobel of Hartford, Conn.; Goodkind Labaton Rudoff & Sucharow of New York; and Law Offices of Charles J. Piven of Baltimore — all allege that Shurgard misled investors by issuing “false or misleading” financial statements between May 9, 2001, and March 26, 2004. They are seeking class-action status for the suits, with the proposed class being anyone who bought Shurgard’s stock or publicly traded debt between those dates.

In May 2004, Shurgard issued revised financial reports for 2001, 2002 and the first nine months of 2003 — cutting its previously reported profit in each case.

Shurgard General Counsel Jane Orenstein said in a statement that “we do not believe that the claims in the lawsuit have any merit and we will defend the company vigorously against the suit.”

Earnings won’t shift strategy, Washington Mutual COO says

Washington Mutual’s new president and chief operating officer, Steve Rotella, told analysts yesterday he plans to help execute the company’s existing strategy.

In a conference call about WaMu’s fourth-quarter earnings, which were released Wednesday, Rotella said, “My job is to help us prioritize our resources, make sure that we have the best people, the best governance processes, improve our technology and move us forward to execute crisply on the plan.”

Rotella — the former chief executive of Chase Home Finance at JP Morgan Chase, who began working at WaMu last week — added that his mantra is “focus, execution and speed of decision-making.”

After the market closed Wednesday, the Seattle maker of network traffic-management systems reported that its first-quarter profit rose 163 percent to $10 million, or 26 cents a share, on sales of $60 million. It also predicted that second-quarter profit would be as much as 29 cents a share on sales of as much as $65 million.

The news pushed the company’s stock up $6.06 to $50.75.

UW fund established to boost technologies

The University of Washington and the Washington Research Foundation said yesterday they have established a $750,000 fund to further develop technologies discovered at the university that have commercial potential.

The Technology Gap Innovation Fund is initially sponsoring five UW investigators to further develop their inventions. Part of the fund, $500,000, comes from the university’s licensing and royalty income. The remaining $250,000 comes as a gift from the Washington Research Foundation. The grants, which last for a year, are limited to $50,000 per project.

The initial projects getting grants include a high-quality, environmentally friendly lighting system, an automated screening method for potential drug targets, and a noninvasive device for monitoring atrial fibrillation, a type of irregular heartbeat that can lead to stroke or congestive heart failure.

Nation/World

Tossing of Merrill Lynch lawsuit by investors upheld

A federal appeals court agreed yesterday that a lower court was right to throw out class-action lawsuits blaming investors’ losses in two Internet companies on failures by one-time star Internet analyst Henry Blodget.

The 2nd U.S. Circuit Court of Appeals upheld the findings of the late U.S. District Judge Milton Pollack, who tossed out the lawsuit brought by investors against Blodget and his former employer Merrill Lynch.

A three-judge appeals court panel wrote that the lawsuits blaming Merrill Lynch and Blodget for misleading investors failed to show that the alleged misrepresentations and omissions in research reports caused the losses.

IBM told to give up more code to SCO Group

A federal judge in Utah has ordered IBM to turn over more programming code to SCO Group, whose lawsuit accuses IBM of illegally inserting proprietary Unix code into the Linux operating system.

The ruling, released late Wednesday, requires IBM to produce the additional code by March 18.

SCO is seeking at least $5 billion from IBM. The lawsuit is scheduled to go to trial in November.